Why is the rise in the graphite electrode price inevitable?

Not only did China’s graphite electrodemarket took a severe hit in recent years, overseas graphite electrode enterprises were also confronted with harsh environment in operationand decline in production capacity. For instance, SGL Group shut down plants inItaly, Spain and Canada, and signed an sales agreement with Showa in November2016. However, global steel output didn’t show substantial drop in recentyears. In 2016, global crude steel output is 1.6285 billion tons, up 0.8% froma year earlier. Across the globe, regions that registered growth in crude steeloutput include Europe, America and Africa; those recorded decline include CIS,the Middle East, Asia and Oceania. Overseas HP graphite electrode market will facesupply shortages as well.

In this context, ICCNews has reached out to and gathered information from major graphite electrode manufactures at home and abroad.
★ One manager from Carbon indicated current rise in electrode prices isn’t enough to coverthe increase in cost. Their graphite electrode shipments are going well with potentialfor growth going forward.
★ One manager from SGLGroup said their graphite electrode shipments are very smooth, and they arerunning short of goods to fulfill orders at hand and won’t be able to makedeliveries for at least three months, especially for overseas customers.
★ According to thehead of Showa Denko Sichuan Carbon, they haven’t encountered supply crunch yet asdownstream demand for their UHP 600-700 type products are rather stable;although, as soaring refractory raw materials prices driven up production cost, thecompany has announced to raise price by 15%-25% from April of 2017 so as toensure continued and stable supply of high quality refractory products to customers.
★ One graphite electrodemanufacture of small- and medium-scale from Hebei introduced, even though pricehas been raised, the shipment of their main products, HP graphite electrodes,is mediocre, which, with the slack season playing a part in it, to some extentreflects the unwillingness towards the price rise of downstream sectors.

Right now, steelenterprises carry out electrode electrode supplier contract mostly on a quarterly http://basis.In such situation, purchases went down differently at downstream steelmakers. Somesaw only 2000 yuan/mt difference in price before the CNY and after it.Enterprises that had contract signed before the CNY are rather cool-headed inthe face of recent price rise, while those that are making purchases right nowclearly feel the pinch of higher price. One purchaser from a major domesticspecialty steel enterprises expressed their concern over further rise inelectrode price going forward on the already 20-30% increase. As governmentfurther reins in excessive and extensive capacity, places more emphasis on energyconservation, environmental protection and emission control, tightensregulation and restriction on rigid index, the proportion of EAF steel in China will increase gradually. Demand for HP graphite electrode bysteelmakers is set to grow. At the same time, graphite electrode demand fromyellow phosphorus, silicon metal enterprises will also show significant growth.
Given all these factors, the upward trend of UHP graphite electrode price will be unstoppable in 2018.

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